Wall Street Investors Want To Enter The Crypto Market In Many Different Ways
Bitcoin has spiked to over $8,200 dollars in the last days for the first time since May, and after being traded under $7,000 for more than a month. This price movement has been closely followed by Wall Street investors that want to enter the market as soon as possible.
But it is important to mention that the trading activity fell 26% in the last months (between April and July), as Coindesk explained in its quarterly State of the Blockchain report that we covered at BitcoinExchangeGuide.
Since December 2017, Bitcoin lost more than 65% of its price and couldn’t recover as it would have liked. But it seems that important investors from Wall Street are trying to create cryptocurrency-related products for institutional investors. If the services provided are reliable and address the correct issues, Bitcoin could receive an important price boost in the near future.
It is important to mention that the comment period ended for the recently proposed Bitcoin Exchange Traded Fund (ETF) from Van Eck Associates and SolidX Management. The U.S. Securities and Exchange Commission is going to make a determination on the ETF in the next 90 days.
Akbar Thobhani, CEO Of Crypto Broker-Dealer SFOX, Commented:
“My belief is that the recent price increase is being driven by the speculation that the SEC will approve a bitcoin ETF, which would open the doors for the traditional financial institutions (pension funds, etc.) to enter the market.”
In the past, many other Bitcoin ETFs have been rejected by the SEC saying that the sector was very volatile and that the intention is to avoid creating products for retail investors.
Additionally, the SEC is focused on Ether (ETH), the second most important virtual currency in the market after Bitcoin. During a conference, Mr. William Hinman, SEC Director of Corporate Finance, cleared away some of the regulatory uncertainty on the matter. He Explained that Ether is not a security.
At the same time, we already know that most of the ICOs are deemed as unregistered securities.
This decision has allowed Cboe Holdings, to start offering Ether futures products. During the last year, Cboe Holdings launched Bitcoin futures trading.
“We are pleased with the SEC’s decision to provide clarity with respect to current Ether Transactions,” explained Cboe’s president and chief operating officer, Chris Concannon. “This announcement clear a key stumbling block for Ether futures, the case for which we’ve been considering since we launched the first bitcoin futures in DEcember 2017.”
At the moment Cboe has an agreement with the famous and regulated cryptocurrency exchange known as Gemini Trust, allowing it to use Gemini’s data so as to create cash-settled ether futures. Until now, there is no further information on the matter.
Another important institution offering Bitcoin futures, the Chicago Mercantile Exchange (CME Group) is not thinking about offering Ether futures. The Commodity Futures Trading Commission (CFTC) did not comment on whether it would be open to allow ether futures to start trading.
Those Bitcoin futures had an important influence in the market. At the beginning it helped drive the prices of cryptocurrencies up, but later they became a shorting option for some traders. According to the research firm Fundstrat, Bitcoin price dip ahead the Cboe futures expirations. The famous virtual currency lost over 18% 10 days before the expiration.
But Concannon explains that falling Bitcoin prices are related to other situations, including uncertainty in the regulatory market, steps taken by government tax collectors, the rise of other important currencies, and a declining media interest in the asset.
Another recognized institution, the Federal Reserve Bank of San Francisco, argued that the introduction of ETFs, helped the price of Bitcoin decline since last December because it is short-selling easier.
At the moment of writing this article, Bitcoin is the first cryptocurrency in the market with a total value of $141 billion dollars and a price per coin of $8,200 dollars, according to CoinMarketCap.